Self-driving truck startup Aurora Innovation to sell up to $420M in shares ahead of commercial launch

Self-driving technology company Aurora Innovation is looking to raise hundreds of millions in additional capital as it races towards a driverless commercial launch by the end of 2024. 

Aurora, which went public in 2021 through a special purpose acquisition merger, is pursuing a driver-as-a-service model, wherein carriers purchase trucks with the Aurora Driver tech on board and then offer their services via those trucks to shippers. But the company is planning to go to market as a carrier, offering up to 20 autonomous Paccar and Volvo trucks to shippers at the end of this year.

Per an SEC filing Thursday morning, Aurora has now arranged to sell up to $420 million worth of Class A common stock to underwriters Goldman Sachs, Allen & Company and Morgan Stanley. The company made its public debut through a special purpose acquisition merger in 2021, and its stock has traded as high as $13.12 on opening day.

The underwriters have committed to buying the shares from Aurora at $3.4830 per share, which is slightly less than the public offering price to account for their fees and compensation. If the deal goes through on August 2, they’ll resell the shares to the public at $3.60 per share. 

Aurora’s stock price climbed almost 29% to $4.50 after the filing dropped. 

The agreement comes a day after Aurora filed a prospectus offering to sell $350 million worth of  shares. Someone familiar with the matter told TechCrunch that due to strong investor demand, the offering was upsized to $420 million. 

Aurora did not respond to questions about how it intends to use the net proceeds, but the filing states that the company will put the money towards “working capital and other general corporate purposes.” What that means specifically, perhaps even Aurora doesn’t know. The company also wrote in its filing that it’ll first invest the proceeds from this offering into “short and long-term investment grade instruments, certificates of deposit or guaranteed obligations.”

The bid for more funds comes as Aurora reports its second-quarter results. As of June 30, 2024, Aurora had $402 million in cash and cash equivalents and $618 million in short-term investments. Not including the proceeds from its offering, the company expects this to be enough to fund operations into the fourth quarter of 2025.

In Q2 2024, Aurora spent $198 million, which is a direct loss because the startup isn’t yet pulling in any revenue. 

So unless Aurora is garnering significant interest or returns from its short-term instruments, the startup will have to significantly reduce its cash burn to stretch $402 million out over the next six quarters. 

Perhaps Aurora is counting on future revenue to offset its costs. The company is slated to start its commercial service later this year on the Uber Freight network. In June, the two companies announced a multi-year collaboration that will see Aurora’s autonomous driving technology offered on the Uber Freight network through 2030.